How to Calculate Michigan State Income Tax

How to Calculate Michigan State Income Tax. Michigan is among the states that do not use a tax bracket system, applying a flat tax rate to all incomes earned by state residents instead. You can calculate what you'll owe in income tax by applying the rate to your taxable income.

Determine Your Taxable Income

Step 1

Refer to your W-2, which you'll receive from your employer, to total your yearly wage earnings at your job. If taxes are withheld from your paychecks, they'll be summarized on the form.

Step 2

Figure out how much money you made in total during the year if you're the owner of a small business. You'll also need to do this if you are a self-employed person and will not receive a W-2 from an employer.

Step 3

Include income from all other non-employment sources when you calculate your annual income.

Step 4

Take some time to learn about the various tax deductions for which you may qualify. A seasoned income tax preparation professional can really earn his wage here, helping you find little-known deductions.

Step 5

Arrive at a taxable income figure by taking the sum of your tax deductions away from the total amount of money you made during the year.

Calculate Your Michigan State Tax Rate

Step 1

Calculate what you'll owe the Michigan government in state income taxes using the flat income tax rate of 3.9 percent.

Step 2

Take your total taxable income, and multiply it by 0.039 to figure out how much you'll be paying in state income tax. To use a straightforward example, someone making $25,000 would owe the state government $975.

Step 3

Refer to the personal income tax pages on the Michigan Department of Treasury website for further information (see Resources below). The government site is an essential source of up-to-date information regarding Michigan tax regulations. Check annually, before you prepare your tax return, to see whether any changes have been made in state law.


Save all financial documents, pay stubs and receipts for expenditures in case you get audited by the IRS. While tax preparation professionals charge significant fees, it can be worth the investment. They may be able to help you save money through the application of tax deductions.


Avoid the potential of facing fines or prison time because of tax evasion. Report your earnings honestly.

Things You'll Need

  • W-2 statement or equivalent

  • Calculator

  • Tax-preparation specialist (recommended)